Competition as a Constitutional Principle

When the Constitution is ambiguous or silent on a particular issue, this Court has often relied on notions of a constitutional plan- the implicit ordering of relationships within the federal system necessary to make the Constitution a workable governing charter and give each provision within that document the full effect intended by the Framers. The tacit postulates yielded by that ordering are as much engrained in the fabric of the document as its express provisions, because, without them, the Constitution is denied force, and often meaning.- William H. Rehnquist

Nevada v. Hall, 440 U.S. 410, 433 (1979) (Rehnquist, J., dissenting).

Today, as threatened in an earlier post, a few more words on competition, the Founders, and the Constitution and its federalism. What warrant do we have to read modern-day competitive federalism theory back into the Constitution?

If you put it that way, none: I’m dead-set against reading stuff into the Constitution. But the tendentious question assumes its own answer. What I favor, and what I think must be done, is to elicit from the Constitution’s text the structural principles on which it rests, and without which it cannot work. Chief Justice Rehnquist put the point well.

Some contemporary originalists—Keith Whittington, Randy Barnett, Larry Solum, probably Michael McConnell; arguing from a different starting point, Jack Balkin—are perfectly happy to engage this sort of structural argument in one form or another. Other resist it because it seems too far from the text, too “purposive,” too political and normative. I get that. But the thing is, not any old principle will do. Structural principles have to make the text hang together, make it work, and leave no clause unexplained or without force and meaning. And I suspect that the set of constitutional principles in this sense is actually quite small, and more likely to discipline than unleash jurisprudence.

Here’s a principle that won’t work: the modern Supreme Court’s notion of federalism as a “balance” between states and the federal government. If that were a (let alone the) constitutional principle, you’d expect to see some equilibrating principle in the Constitution—but there isn’t any. You’d expect some “fair” distribution of revenues, enshrined in a “fiscal constitution” that is part and parcel of federal constitutions around the world—but not of ours, which establishes tax competition over very nearly the entire base. You’d expect the Supreme Court’s composition and jurisdiction to reflect local concerns and prerogatives in some way; Article III yields not an inch to considerations of that sort.

In sharp contrast, competition as a constitutional federalism principle will work. It explains the Constitution’s “silences” (e.g., its lack of a cartelizing fiscal constitution); its basic structural arrangements, from diversity jurisdiction to an open domestic market and on to the Bill of Rights; and every single clause, down to the Port Preference Clause (a pro-competitive non-discrimination rule) to the Compact Clause (an explicit anti-cartel rule). And “competition” is an actual theory that we can work through and explain, not a mere slogan (“balance!”).

One further thought, capably expounded by my former colleague Chris DeMuth in a splendid National Affairsessay on “Competition and the Constitution”: competition—as a principle and strategy—pervades The Federalist and the entire Constitution. The theory of the “extended republic” and of “ambition counteract[ing] ambition” are competition theories. The separation of powers and bicameralism are competitive (anti-monopoly) devices, as are checks and balances. (Robert Cooter’s The Strategic Constitution has a terrific chapter on this theme.) The Establishment Clause is a competitive device (it forbids government from cartelizing the religion “market.”) It’s true that Madison & Co. articulated explicit theories on these themes but largely missed the competitive virtues and dynamics of the “compound republic.” But it’s also true that competitive federalism is continuous with their overall architecture and theory. And it’s often true that the later developments, real world (e.g. political parties) or theoretical (e.g. the Coase theorem), allow us to understand the Founders’ architecture better than they understood it themselves.

Michael S. Greve is a professor at George Mason University School of Law. From 2000 to August, 2012, Professor Greve was the John G. Searle Scholar at the American Enterprise Institute, where he remains a visiting scholar. His most recent book is The Upside-Down Constitution (Harvard University Press, 2012).

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